NNI - Nelnet stock falls over 3% on more layoffs as contract changes hit student loan servicing

2023-03-23 16:51:45 ET

Nelnet ( NYSE: NNI ) on Thursday announced more job cuts in its diversified services unit in response to lower pricing and reduced servicing volume for its federal servicing contracts.

Shares of the student loan servicer fell 3.7% after the bell.

The Department of Education modified its current loan servicing contracts with Nelnet ( NNI ) to significantly reduce the price earned by the firm per borrower per month.

The agency also notified Nelnet ( NNI ) that it will transfer 1M borrowers from Nelnet Loan Servicing to another federal servicer. The transfer, which was not based on Nelnet's ( NNI ) performance, will occur over the next few months.

Around 550 associates in the diversified services unit and some in related shared services areas that support the unit were laid off.

Nelnet ( NNI ) will also look for redundancies and efficiencies throughout the year related to the conclusion of projects centered on the consolidation of select loan servicing platforms. No other businesses are impacted.

Nelnet ( NNI ) will continue migrating borrowers from legacy systems to modern platforms and sunset the legacy systems.

The latest job cuts follow layoffs announced earlier this year, which Nelnet ( NNI ) said were due to delays in the student debt relief and return to repayment programs .

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